Irish whiskey sales up 21% on last year but small producers hit by glass bottles and malt price hikes

Global sales of Irish whiskey are expected to grow this year by more than 10 per cent in volume despite the loss of almost all sales to Russia, which accounted for more than 5 per cent of the market before the war in Ukraine, according to industry figures.

The Irish Whiskey Association (IWA), the sector’s lobbying division in employers group Ibec, says global sales in 2021 reached a record 14 million cases (168 million bottles), a rise of 21 per cent by volume on the previous year. It says the surge is down to growing popularity of whiskey as a premium product, especially with millennials, more ecommerce and better trade terms in countries such as Canada.

In its annual International Trade Report, due to be launched later on Wednesday, the IWA predicts strong growth again this year. But it also warns that supply chain issues, such as a shortage of glass bottles and more expensive malt, as well as increasing energy costs threaten the viability of many smaller producers. It wants the Government to get more tariff reductions in growing markets such as India.

“That 7 per cent [Russia’s sales plus the 1.7 per cent previously sold to Ukraine] is a hole [in 2022′s performance],” said William Lavelle, director of the IWA. Russia was the third-biggest market for Irish whiskey globally before the war, with sales of 716,900 cases in 2021. Ukraine was Irish whiskey’s eighth-biggest market before the war. Mr Lavelle said some sales to that market have recovered since the war.

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“But despite Russia and Ukraine, I predict double-digit growth [by volume] this year,” he said. US sales, which account for 41 per cent, are “not slowing down” while emerging markets such as India, South Africa and China are also driving growth.

Mr Lavelle said supply chain issues are the biggest constraint on growth for whiskey, with some of Ireland’s more than 40 distilleries unable to fulfil international demand for the product due to shortages of raw materials. IWA’s trade report says glass bottles are up to 30 per cent more expensive with lead times of up to two months, while the cost of American oak barrels used for ageing is also up 30 per cent and the price of malt has doubled.

Mr Lavelle also warned that logistical issues, such as lengthy delays at US ports, are also helping to create challenging conditions for Irish whiskey sales. The IWA is hoping for reduced tariffs on sales in India, Kenya and also Mercosur countries — Brazil, Argentina, Paraguay and Uruguay.

Irish whiskey sales have almost trebled since 2010, when there were just four producers on the island.